A head-on collision left a husband and wife in Missouri seriously injured and seeking compensation.

They were successful in securing a collective $3 million judgment against the opposing driver, but that driver did not have enough insurance coverage to pay the judgment. Victims then proceeded to pursue action against the auto insurance company that provided coverage to husband’s employer, seeking underinsured motorist coverage.

Primarily at issue in Bate v. Greenwhich Ins. Co., before the Missouri Supreme Court, was not whether coverage existed, but whether the default judgment granted by trial court was improper. Default judgments can be issued when one party fails to respond to litigation. The courts do not favor default judgments, and generally prefer to decide cases on the merits. Plus, default judgments are almost always challenged when it comes time for plaintiff to collect.

One of the more common defenses in these circumstances is improper service of process. State laws vary on what is proper service, but the basic principle is a plaintiff has to make sure defendant is aware of the case against it before a judgment can be issued.

In this case, defendant was a “foreign” insurance company, based out of Delaware. In Missouri, any foreign insurer doing business there executes an irrevocable power of attorney to authorize the state Director of the Missouri Department of Insurance to receive or acknowledge service of process on its behalf.

In this case, service of process was made to the director, and it was shown the director forwarded the affidavit notifying the insurer of the pending case. Permanent records kept by the department prove this.

The insurance company argued it was not properly notified, and therefore, state law was not followed.But the court found the director – as the de facto agent of the insurer – was properly notified, and therefore plaintiffs complied with the law.

The company also argued the law wasn’t followed because an office worker in the department’s office signed the paperwork, as opposed to the director, deputy director or chief clerk. But on this fact, the court found, defendant raised the issue for the first time on appeal, and thus it was not properly preserved for the court’s consideration.

Defendant insurer also argued plaintiffs weren’t named beneficiaries under the policy and that the policy didn’t even contain UIM benefits. The state high court did not deny that these defenses were potentially meritorious. However, the company didn’t respond in a timely manner to the proceedings against it even though it was properly notified. So from a legal standpoint, the default judgment was proper.

Auto insurance companies are notorious for doing everything they can to limit or outright deny liability. That’s why it’s so imperative to have an experienced auto accident lawyer on your side when filing a claim for compensation.

While $3 million may sound excessive, consider that head-on collisions are some of the most injurious types of crashes. These are crashes that happen when one or both drivers crosses into an opposing lane of traffic. Because at least one of the vehicles is typically traveling at a higher rate of speed, these wrecks often result in outcomes that are far worse than in side-impact or rear-end crashes.

If you have been injured in an accident, contact the Hollander Law Firm at 888-751-7777 for a free and confidential consultation. There is no fee unless we win.